r 


IN  SENATE  OF  THE  UNITED  STATES, 
March  29,  1830. 


Read,  and  ordered  to  be  printed. 


Mr.  Smith,  of  Maryland,  made  the  following 

REPORT: 


The  Committee  on  Finance , to  which  was  referred  a resolution  of  the 
30 th  December , 1829,  directing  the  Committee  to  inquire  into  the 
expediency  of  establishing  an  uniform  National  currency  for  the 
United  States , and  to  report  thereon  to  the  Senate , report: 

That  nothing  short  of  the  imperative  order  of  the  Senate  could  induce 
the  committee  to  enter  on  a subject  so  surrounded  with  difficulty.  They 
undertake  it  with  diffidence  and  a distrust  of  their  capacity  to  elucidate  a sub- 
ject that  has  engaged  many  nations,  and  the  pens  of  the  ablest  writers,  with- 
out, as  yet,  coming  to  any  definite  conclusion.  It  still  remains  to  be  deter- 
mined, What  is  the  soundest  and  most  uniform  currency?  One  nation  as- 
sumes one  system,  another  a different  plan.  In  one  nation,  a plan  is  de- 
vised, and  succeeds  for  a time  by  prudent  and  restrictive  emissions.  Elated 
with  success,  larger  and  more  extensive  emissions  are  risqued;  a rapid  no- 
minal rise  ot  all  property  takes  place;  the  people  are  not  aware  that  such 
nominal  rise  is  the  effect  of  depreciation;  the  bubble  bursts,  and  ruin  to  the 
unsuspecting,  is  the  consequence.  All  history  shows  such  a result  in  seve- 
ral nations,  and  particularly  in  that  of  the  United  States.  The  Committee, 
engaged  on  a variety  of  subjects,  cannot  devote  so  much  time  on  the  reso- 
lution as  the  mover  must  believe  would  be  necessary  to  develop  fully  the 
question  before  them,  to  wit:  A sound  and  uniform  National  Currency.— 

Presuming,  from  the  tenor  of  the  resolution,  that  the  uniform  National  €ur- 
rency  proposed,  must  be  prepared  by  the  National  Government,  circulated 
under  its  authority,  and  maintained  by  its  credit,  the  committee  have  com- 
plied with  the  instruction  of  the  Senate,  by  endeavoring  to  devise  shine  plan, 
through  which  the  agency  of  the  Government,  in  such  a measure,  could  be 
safe,  or  useful;  but,  after  giving  to  it  all  the  consideration  they  could  be- 
stow, their  reflections  have  resulted  in  a belief  that  any  such  measure  must 
resolve  itself,  at  last,  into  a mere  system  of  paper  money,  issued  by  the 
Government.  The  resort  to  the  issue  of  a paper  money  has  been  often  the 
desperate  expedient  of  the  wants  of  a nation.  It  has  then  found  its  justifi- 
cation only  in  the  necessity  which  created  it:  yet  such  are  its  inevitable 
evils,  that  every  prudent  Government  has,  the  moment  its  pressing  exigen- 
cies permitted,  returned  to  the  only  safe  basis  of  a circulating  medium,  the 
precious  metals,  and  the  private  credits  attached  to  the  use  of  them.  Such 


were  the  expedients  of  the  Government  of  the  United  States  during  its  two 
wars;  such  its  immediate  abandonment  of  them  at  the  return  of  peace.  But, 
in  the  present  condition  of  the  Treasury  of  the  United  States,  with  a revenue 
far  beyond  its  wants,  with  a debt  almost  nominal,  and  hastening  to  its  entire 
extinguishment,  such  a measure  is  not  needed  by  the  interests  of  the  Govern- 
ment, nor  is  there  the  slightest  indication  of  its  being  demanded  by  the 
wants  of  the  country.  Of  such  an  issue  of  paper  money,  the  Executive  at 
Washington  would  be  the  natural  fountain, — the  agents  of  the  Executive, 
the  natural  channels.  The  individuals,  and  corporations,  and  States,  who 
borrowed  it,  must  become  debtors  to  the  Government;  and  the  inevitable 
consequence  would  be,  the  creation  of  a monied  engine  of  direct  depen- 
dence on  the  officers  of  Government,  at  variance  with  the  whole  scheme  of 
our  institutions.  The  limit  to  which  this  currency  should  be  issued,  the 
persons  to  whom  it  should  be  lent,  the  securities  taken  for  its  repayment, 
the  places  where  it  should  be  redeemed,  involve  great  complication  and  great 
hazard,  regarding  it  merely  in  a financial  point  of  view,  while,  on  more  en- 
larged considerations  of  political  expediency,  the  objections  to  it  are,  in  the 
opinion  of  the  committee,  insuperable  and  fatal. 

Believing  such  a scheme  to  be  impracticable,  the  committee  were  con- 
soled with  the  reflection  that  it  is  unnecessary , as  they  are  satisfied  that  the 
country  is  in  the  enjoyment  of  an  uniform  National  currency,  jiot  only 
sound  and  uniform  in  itself,  and  perfectly  adapted  to  all  the  purposes  of  the 
Government  and  the  community,  but  more  sound  and  uniform  than  that  pos- 
sessed by  any  other  country.  The  importance  of  this  truth  will  justify  the 
committee  in  stating  some  details  to  establish  it. 

The  currency  of  the  United  States,  the  only  legal  currency,  is  gold  and 
silver.  All  debts  to  the  Government,  and  all  debts  to  individuals,  being 
received  in  that  medium,  and  in  no  other.  As,  however,  the  amount  of  coin 
requisite  for  these  purposes  would  be  unmanageable  and  inconvenient,  the 
United  States,  like  other  commercial  countries,  have  adopted  the  system  of 
making  credit  supply  many  of  the  uses  of  coin:  and  numerous  banking 
companies  have  been  established,  issuing  notes,  promising  to  pay  on  demand, 
gold  and  silver.  The  Government  of  the  United  States  has  established  one 
of  a similar  character;  and  for  the  convenience  of  the  community,  the  public 
revenue  is  collected  in  gold  and  silver,  the  notes  of  the  Bank  of  the  United 
States,  and  the  notes  of  such  solvent  State  banks,  as  the  Bank  of  the  United 
States  and  its  branches  will  receive  as  cash. 

The  currency,  therefore,  of  the  United  States,  in  its  relation  to  the  Go- 
vernment of  the  United  States,  consists  of  gold  and  silver,  and  of  notes  equi- 
valent to  gold  and  silver.  And  the  inquiry  which  naturally  presents  itself, 
is,  whether  this  mixed  mass  of  currency  is  sound  and  uniform  for  all  the 
practical  purposes  of  the  Government,  and  the  trade  of  the  Union.  That  it 
is  so,  will  appear  from  the  following  facts: 

1st.  The  Government  receives  its  revenue  from — 

343  Custom  Houses, 

42  Land  Offices, 

8,004  Post  Offices, 

1 34  Receivers  of  Internal  Revenue, 

37  Marshals, 

33  Clerks  of  Courts, 

These,  with  other  receiving  officers,  which  need  not  be  specified,  com- 
pose an  aggregate  of  more  than  9,000  persons,  dispersed  through  the  whole 
of  the  Union,  who  collect  the  public  revenue.  From  these  persons,  the 


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Government  lias,  for  the  ten  years  preceding  the  1st  of  January,  1830,  re- 
ceived  two  hundred  and  thirty  millions,  sixty-eight  thousand,  eight  hun- 
dred and  fifty -five  dollars  and  seventeen  cents,  (8230,068,855  17.)  This 
sum  has  been  collected  in  every  section  of  this  widely  extended  country. 
It  has  been  disbursed  at  other  points,  many  thousand  miles  distant  from 
the  places  where  it  was  collected;  and  yet  it  has  been  so  collected  and 
distributed,  without  the  loss,  as  far  as  the  committee  can  learn,  of  a sin- 
ole  dollar,  and  without  the  expense  ot  a single  dollar  to  the  government. 
That  a currency,  by  which  the  Government  has  been  thus  enabled  to  col- 
lect and  transfer  such  an  amount  of  revenue  to  pay  its  army  and  navy, 
and  all  its  expenses,  and  the  national  debt,  is  unsafe  and  unsound,  can- 
not readily  be  believed:  for  there  can  be  no  surer  test  of  its  sufficiency, 
than  the  simple  fact  that  every  dollar  received  in  the  form  of  a bank 
note  in  the  remotest  parts  of  the  interior,  is,  without  charge,  converted 
into  a silver  dollar,  at  every  one  of  the  vast  number  of  places  where  the 
service  of  the  Government  requires  its  disbursement.  The  Secretary  of  the 
Treasury,  in  his  report  of  the  6th  of  December,  1828,  declares  that,  during 
the  four  years  preceding,  the  receipts  of  the  Government  had  amounted  to 
more  than  ninety-seven  millions  of  dollars,  and  that  “all  payments  on  ac- 
count of  the  public  debt,  whether  for  interest  or  principal:  all  on  account  of 
pensions:  all  for  the  civil  list;  for  the  army;  for  the  navy;  or  for  whatever 
purpose  wanted,  in  any  part  of  the  Union,  have  been  punctually  met.”— 
The  same  officer  states,  that  “it  is  the  preservation  of  a good  currency  that 
can  alone  impart  stability  to  property,  and  prevent  those  fluctuations  in  its 
value,  hurtful  alike  to  individuals,  and  to  national  wealth.  Fliis  advantage, 
the  Bank  has  secured  to  the  community,  by  confining  within  prudent  limits 

its  issues  of  paper,  &c.  &c.  . 

2d.  If  this  currency  is  thus  sound  and  uniform  for  the  Government,  it  is 

not  less  so  to  the  community. 

The  basis  of  all  good  currency,  should  be  the  precious  metals,  gold  and 
silver;  and  in  a mixed  currency  of  paper  circulating  with  gold  or  silver,  and 
convertible  into  it,  the  great  object  to  be  attained  is,  that  the  paper  should 
always  be  equal  to  gold  or  silver;  that  is,  it  should  always  be  exchangeable 
for  gold  or  silver.  Such  a currency  is  perfect,  uniting  the  convenience  of  a 
portable  material  with  the  safety  of  a metallic  medium.  Now  it  cannot  be 
cioubted,  that  throughout  this  whole  country,  the  circulating  bank  notes  are 
equal  to  specie,  and  convertible  into  specie.  I here  may  be,  and  probably 
are,  exceptions;  because  among  banks,  as  among  men,  there  are  some  who 
make  a show  of  unreal  strength.  But  it  is  a fact,  so  familiar  to  the  expe- 
rience of  every  citizen  in  the  community,  as  to  be  undeniable,  that,  in  all 
the  Atlantic  and  commercial  cities,  and  generally  speaking,  throughout  the 
whole  country,  the  notes  of  the  State  banks  are  equal  to  gold  or  silver.  The 
committee  do  not  mean  to  saydhat  there  may  not  be  too  many  banks,  or 
that  insolvencies  do  not  occasionally  occur  among  them;  but  as  every  bank 
which  desires  to  maintain  its  character,  must  be  ready  to  make  settlements 
with  the  Bank  of  the  United  States,  as  the  agent  of  the  Government,  or  be 
immediately  discredited,  and  must  therefore  keep  its  notes  equal  to  gold  or 
silver,  there  can  be  little  danger  to  the  community,  while  the  issues  of  the 
banks  are  restrained  from  running  to  excess,  by  the  salutary  control  of  the 
Bank  of  the  United  States,  whose  own  circulation  is  extremely  moderate, 
compared  with  the  amount  of  its  capital.  Accordingly,  the  fact  is,  that  the 
general  credit  of  the  banks  is  good,  and  that  their  paper  is  always  converti- 
ble into  gold  or  silver,  and  for  all  local  purposes  forms  a local  currency  equi- 


4 


vdlent  to  gold  and  silver.  There  is,  however,  superadded  to  this  currency,  a 
general  currency  more  known,  more  trusted ; and  more  valuable  than  the 
local  currency,  which  is  employed  in  the  exchanges  between  different  parts 
of  the  country.  These  are  the  notes  of  the  national  bank.  These  notes  are 
receivable  for  the  Government,  by  the  9,000  receivers,  scattered  throughout 
every  part  of  the  country.  They  are  in  fact , in  the  course  of  business , 
paid  in  gold  or  silver , though  they  are  not  legally , or  necessarily  so  paid,  by 
the  branches  of  the  bank  in  every  section  of  the  Union . In  all  commer- 
cial places  they  are  received,  in  all  transactions,  without  any  reduction  in 
value,  and  never,  under  any  circumstances,  does  the  paper,  from  the  re- 
motest branches,  vary  beyond  a quarter  of  one  per  cent,  in  its  actual  ex- 
change for  silver.  Here,  then,  is  a currency  as  safe  as  silver;  more  conve- 
nient, and  more  valuable  than  silver,  which,  through  the  whole  Western  and 
Southern,  and  interior  parts  of  the  Union,  is  eagerly  sought  in  exchange  for 
silver;  which  in  those  sections,  often  bears  a premium  paid  in  silver;  which 
is  throughout  the  Union  equal  to  silver  in  payment  to  the  Government  and 
payments  to  individuals  in  business,  and  which,  whenever  silver  is  needed 
in  any  part  of  the  country,  will  command  it,  without  the  charge  of  more  than 
a slight  fraction  of  a per  centage.  By  means  of  this  currency,  funds  are  trans- 
mitted at  an  expense  less  than  in  any  other  country.  In  no  other  country 
can  a merchant  do  what  every  citizen  of  the  United  States  can  do — deposite, 
for  instance,  his  silver  at  St.  Louis,  or  Nashville,  or  New  Orleans,  and  re- 
ceive notes,  which  he  can  carry  with  him  1,000  or  1,500  miles,  to  the  At- 
lantic cities,  and  there  receive  for  them  an  equivalent  amount  of  silver,  with- 
out any  expense  whatever;  and  in  no  possible  event,  an  expense  beyond  a 
quarter  of  one  per  cent.  If,  however,  a citizen  does  not  wish  to  incur  the 
anxiety  of  carrying  these  notes  with  him,  or  to  run  the  hazard  of  the  mail,  he 
may,  instead  of  them,  receive  a draft,  payable  to  himself  or  his  agent  alone, 
so  as  to  ensure  the  receipt  of  an  equal  amount,  at  an  expense  of  not  one-half, 
and  often  not  one-fourth,  of  the  actual  cost  of  carrying  the  silver.  The 
owner  of  funds,  for  instance,  at  St.  Louis  or  Nashville,  can  transfer  them  to 
Philadelphia  for  one-half  per  cent.;  from  New  Orleans,  generally,  without 
any  charge  at  all — at  most,  one-half  per  cent.;  from  Mobile,  from  par  to  one- 
half  per  cent.;  from  Savannah,  at  one-half  per  cent.;  and  from  Charleston,  at 
from  par  to  one-quarter  per  cent. 

This  seems  to  present  a state  of  currency  approaching  as  near  to  perfec- 
tion as  could  be  desired:  for  here  is  a currency  issued  at  twenty-four  differ- 
ent parts  of  the  Union,  obtainable  by  any  citizen  who  has  money  or  credit. 
When  in  his  possession,  it  is  equivalent  to  silver  in  all  his  dealings  with  all 
the  9,000  agents  of  the  Government,  throughout  the  Union.  In  all  his  deal- 
ings with  the  interior,  it  is  better  than  silver;  in  all  his  dealings  with  the 
commercial  cities,  equal  to  silver;  and  if,  for  any  purpose,  he  desires  the 
silver  with  which  he  bought  it,  it  is  at  his  disposal,  almost  universally,  with- 
out any  diminution,  and  never  more  than  a diminution  of  one  quarter  per 
cent.  It  is  not  easy  to  imagine,  it  is  scarcely  necessary  to  desire,  any  cur- 
rency better  than  this. 

It  is  not  among  its  least  advantages,  that  it  bears  a proper  relation  to  the 
real  business  and  exchanges  of  the  country;  being  issued  only  to  those  whose 
credit  entitles  them  to  it,  increasing  with  the  wants  of  the  active  operations 
of  society,  and  diminishing,  as  these  subside,  into  comparative  inactivity. — 
While  it  is  the  radical  vice  of  all  Government  paper  to  be  issued  without  re- 
gard to  the  business  of  the  community,  and  to  be  governed  wholly  by  consi- 
derations of  convenience  to  the  Government. 


5 


After  escaping  bo  recently  from  the  degradation  of  a depreciated  paper 
currency,  the  committee  would  abstain  from  every  thing  which  might,  how- 
ever remotely,  revive  it.  The  period  is  not  remote  when,  in  the  language 
of  the  late  Secretary  of  the  Treasury,  the  country  was  oppressed  by  a u cur- 
rency without  any  basis  of  coin,  or  other  effective  check,  and  of  no  value,  as 
a medium  of  remittance  or  exchange,  beyond  the  jurisdiction  of  the  State 
whence  it  had  been  issued — a currency  that  not  unfrequently  imposed  upon 
the  Treasury  the  necessity  of  meeting,  by  extravagant  premiums,  the  mere 
act  of  transferring  the  revenue,  collected  at  one  point,  to  defray  unavoidable 
expense  at  another.”  It  is  still  within  the  recollection  of  the  Senate,  when, 
at  the  seat  of  Government  itself,  specie  could  only  be  had  at  20  or  22  per 
cent,  in  exchange  for  the  bank  paper  promises  to  pay  specie;  that  for  bank 
notes  of  Baltimore,  2 per  cent,  were  paid;  for  those  of  Philadelphia,  6 to  7 
per  cent.;  for  those  of  New  York,  15  to  16  per  cent.;  and  for  those  of  Bos- 
ton, 20  to  22  per  cent.;  ruinous  inequalities,  which  have  now  happily  disap- 
peared. 

3d.  The  soundness  of  the  currency  may  be  further  illustrated  by  the  pre- 
sent condition  of  the  foreign  exchanges. 

Exchange  on  England  is,  at  the  present  moment,  more  than  1 per  cent,  un- 
der par;  that  is,  more  than  one  per  cent,  in  favor  of  the  United  States.  This 
being  the  real  fact,  disguised  by  the  common  forms  of  quoting  exchange  on 
England  at  between  8 and  9 per  cent,  premium. 

It  would  lead  the  committee  too  far  from  its  present  purpose  to  explain 
that  the  original  estimate  of  the  American  dollar,  as  being  worth  four  shil- 
lings and  sixpence,  and  that,  therefore,  the  English  pound  sterling  is  worth 
$4  44,  is  wholly  erroneous,  and  occasions  a constant  misapprehension  of  the 
real  state  of  our  intercourse  with  Great  Britain.  The  Spanish  dollar  has  not 
for  a century,  been  worth  four  and  sixpence:  the  American  dollar  never  was; 
and  whatever  artificial  value  we  may  assign  to  our  coins,  is  wholly  unavail- 
ing to  them  in  the  crucibles  of  London  or  Paris.  According  to  the  latest  ac- 
counts from  London,  at  the  close  of  December  last,  the  Spanish  dollar,  in- 
stead of  being  worth  four  shillings  and  sixpence,  or  54  pence,  was  worth  only 
49i  pence;  the  American  dollar  at  least  one-fourth  per  cent,  less;  so  that,  to 
produce  one  hundred  times  four  and  sixpence,  it  would  be  necessary  to  send 
to  England,  not  100  dollars,  but  109  1-16  Spanish  dollars,  or  109^-  of  the 
United  States’  dollar.  If  to  this  be  added  the  expenses  and  charges  of  send- 
ing the  money  and  converting  it  into  English  gold,  it  will  cost  111;  so  that 
111  is,  at  this  moment,  the  real  par  of  exchange  between  the  United  States 
and  England.  If,  therefore,  a bill  at  sight  can  be  procured  for  less  than  this 
sum,  or  a bill  at  sixty  days  for  one  per  cent,  less,  say  110  per  cent,  it  is 
cheaper  than  sending  silver;  that  is  to  say:  he  who  has  silver  to  send  to  Eng- 
land can  purchase  a bill  on  London  for  a greater  amount  than  he  would  get  if 
he  shipped  the  silver  itself,  and  of  course  exchange  would  be  in  favor  of  the 
United  States  against  England.  Now,  such  bills  can  be  bought  at  a less  rate, 
by  more  than  one  per  cent,  in  every  city  in  the  United  States. 

This  fact  is  conclusive  as  to  the  state  of  the  currency.  If  the  bank  notes  of 
the  country  were  not  equal  to  specie,  specie  would  be  at  a premium,  which 
it  no  where  is  at  present.  If  the  currency  were  unsound,  more  must  be  paid 
of  that  currency  in  order  to  produce  an  equal  amount  of  coin  in  another  coun- 
try, where  these  bank  notes  do  not  circulate.  But  if,  as  is  the  case  at  present, 
the  bank  notes  are  convertible  into  specie:  if  you  can  buy  with  bank  notes  as 
much  as  you  can  buy  with  silver;  and  if,  in  the  transactions  of  the  country 
abroad,  the  merchants,  who,  if  the  notes  were  not  equal  to  coin,  would  go  to 
the  bank  and  ship  the  coin,  can  pay  as  much  debt  in  foreign  countries  with 


6 


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the  notes  as  by  sending  the  coin;  there  seems  nothing  wanting  to  complete 
the  evidence  of  the  soundness  and  uniformity  of  the  currency. 

On  the  whole,  the  committee  are  of  opinion  that  the  present  state  of  the 
currency  is  safe  for  the  community,  and  eminently  useful  to  the  Government; 
that,  for  some  years  past,  it  has  been  improving  by  the  infusion  into  the  cir- 
culating medium  of  a larger  portion  of  coin,  and  the  substitution  of  the  paper 
of  more  solvent  banks  in  lieu  of  those  of  inferior  credit;  and  that,  if  left  to  the 
progress  of  existing  laws  and  institutions,  the  partial  inconveniences,  which 
still  remain,  of  the  paper  currency  of  the  last  war,  will  be  wholly  and  insensi- 
bly remedied.  Under  these  circumstances  they  deem  it  prudent  to  abstain 
from  all  legislation;  to  abide  by  the  practical  good  which  the  country  enjoys, 
and  to  put  nothing  to  hazard  by  doubtful  experiments. 

The  committee  submit,  for  the  information  of  the  Senate,  certain  questions 
propounded  to  the  President  of  the  Bank  of  the  United  States,  together  with 
his  answers  thereto,  and  a document  furnished  bv  that  officer,  shewing  the 
rates  of  exchange  at  which  drafts  are  drawn  by  the  Bank  ot  the  United 
States  and  its  offices  of  discount  and  deposite;  and  ask  to  be  discharged  from 
the  further  consideration  of  the  subject. 

Questions  submitted  to  the  President  of  the  Bank  of  the  United  States 

with  his  answers. 

Question  1.  When  the  Bank  went  into  operation,  was  not  Philadelphia 
paper  ten  per  cent,  worse  than  Boston,  and  that  much  better  than  Baltimore. 

Answer.  Philadelphia  paper  was  17  per  cent,  worse  than  Boston  paper — 9 
to  worse  than  New  York  paper — 4£  better  than  Baltimore. 

Q.  2.  Were  not  the  State  banks  indebted  to  the  Government  in  large  sums, 
which  they  could  not  have  paid  in  Sound  currency,  (if  so,  to  what  amount? 
And  did  not  the  Bank  in  many  instances  assume  those  debts,  and  pay  them 
in  sound  currency,  (if  so,  to  what  amount?)  and  indulge  those  Banks  until  it 
was  convenient  for  them  to  pay?  and  did  not  the  Bank  lose  money  by  such 
indulgence? 

A.  In  the  years  1817  and  1818,  the  Government  transferred  to  the  Bank 
at  Philadelphia,  from  the  State  institutions,  7,472,419  87,  which  was  cashed, 
and  83,336,691  67  of  special  deposite,  to  be  collected  by  the  Bank,  making 
810,809,111  54.  The  loss  sustained  by  the  Bank,  I cannot  estimate.  I 
should  willingly  compromise  for  a loss  of  only  8200,000. 

Q*  3.  Has  the  bank  at  any  time  oppressed  any  of  the  State  Banks? 

A.  Never.  There  are  very  few  banks  which  might  not  have  been  destroy- 
ed by  an  exertion  of  the  power  of  the  bank.  None  have  ever  been  injured. 
Many  have  been  saved.  And  more  have  been,  and  are  constantly  relieved, 
when  it  is  found  that  they  are  solvent  but  are  suffering  under  temporary  diffi- 
culty. 

Q.  4.  When  a State  bank  becomes  indebted  to  the  bank  to  an  improper  ex- 
tent, what  course  do  you  pursue?  Do  you  let  them  go  beyond  a certain  amount 
and  what  is  that  amount? 

A.  The  great  object  is  to  keep  the  State  banks  within  proper  limits;  to 
make  them  shape  their  business  according  to  their  means.  For  this  purpose 
they  are  called  upon  to  settle;  never  forced  to  pay  specie,  if  it  can  be  avoid- 
ed, but  payment  is  taken  in  their  bills  of  exchange,  or  suffered  to  lie  occa- 
sionally until  the  bank  can  turn  round;  no  amount  of  debt  is  fixed,  because 
the  principle  wc  wish  to  establish  is,  that  every  bank  should  always  be  ready 
to  provide  for  its  notes. 


Q.  5.  If  you  give  drafts  on  any  of  the  branches,  or  from  one  branch  on 
another,  or  on  the  mother  bank,  what  is  the  commission  charged. 

A.  The  charge  for  drafts  is  less  than  the  transportation  of  specie.  I send 

a detailed  statement  on  this  point. 

Q.  6.  Do  you,  and  at  every  branch,  pay  specie  on  demand?  Has  there 
ever  been  a refusal? 

A.  Never. 

Q;  y.  Can  you  state  whether  specie  is  more  or  less  abundant  in  the  United 
States  at  present,  than  at  any  former  period?  . 

A At  the  present  moment,  I think,  specie  is  more  abundant  than  usual. 
It  comes  in  as  usual.  And  the  state  of  the  exchanges  with  Europe  is  such 
that  it  is  cheaper  to  buy  bills,  than  to  ship  coin.  The  bank  had,  on  the  first 
instant,  §7,608  GOO,  which  is  more  than  it  has  had  for  nine  years  past.  . 

Q.  8.  When  the  debt  is  annually  paid  off*  to  foreigners,  do  they  remit  in 
specie  or  bills  of  exchange?  Do  you  supply  the  means  in  either  way? 

A.  When  foreigners  are  paid  off,  a part  is  reinvested  in  other  stocks,  a 
part  ies  in  bills,  a considerable  portion  of  which  are  bills  of  the  bank.  Specie 
is  never  resorted  to  unless  the  bill  market  is  so  high  as  to  make  that  mode  of 

remittance  cheaper.  „ . 

Q.  9.  Since  you  commenced  the  purchase  and  sale  ot  bills  ot  exchange, 

has  the  rate  varied;  if  so,  to  what  extent?  _ c 

A.  The  operations  of  the  bank  in  exchanges  has  had  the  effect  ot  prevent- 
ing the  great  fluctuations  to  which  they  were  previously  liable. 

Q.  10.  What  is  the  reason  that  exchange  on  England  continues  above 
what  was  formerly  considered  the  par,  that  is,  the  dollar  valued  at  4s.  6tZ, 
sterling?  Is  it  that  the  intrinsic  value  of  the  dollar  has  been  found  to  be  less 
than  4s  6 d.?  If  so,  what  is  that  intrinsic  value? 

A.  The  reason  is,  that  we  choose  to  call  our  dollar  4s.  6cl.  when  it  never  has 
been  worth  four  and  sixpence,  and  of  course  when  it  goes  abroad,  it  is  esti- 
mated not  by  the  name  we  give  it,  but  according  to  its  real  value. 


ATES  of  EXCHANGE  at  which  Drafts  are  drawn  by  the  Bank  of  the  United  States  audits  Offices  of  Discount  and 

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